These four procurement bottlenecks increase costs for print management firms and their clients.
The print procurement industry may be alive and well, but service providers and outsourcers still face a number of significant challenges in their efforts to win and retain corporate clients.
In our last post, we discussed how a typical Fortune 1000 company spends $100 million or more a year on print procurement. To be successful, brands must reach consumers at a variety of touchpoints throughout the customer journey. While some of these touchpoints are digital, print is often used in everything from direct mail offers to point of sale and point of activation displays, billboards, promotional items and more.
In fact, direct mail is actually thriving as an effective channel. In fact, a recent infographic released by Experian Data Quality Group found:
- 70-80% of direct mail recipients open their mail.
- 60% of direct mail recipients will visit a web site if one is listed.
- Customers who receive direct mail spend 28% more
The benefits of outsourcing a non-core function like print seem pretty clear: procurement professionals have specialized knowledge that can save their clients a significant chunk of money, as much as 30% of spend. However, even for experienced professionals, bringing a print campaign to market is a process fraught with challenges and bottlenecks.
Multiple languages and currencies, different time zones and cultural differences all demand a high degree of collaboration, flawless execution and impeccable timing. If one element is off, the entire campaign ROI can be significantly reduced.
Key processes throughout the marketing supply chain create bottlenecks that delay or degrade the effectiveness and ROI of a campaign. In a recent survey, we asked respondents to rate the impact of these bottlenecks on campaign execution. Here’s how they stacked up:
Top campaign management bottlenecks from
our survey of 200 outsource service providers.
- Creative development: While it came in a close second to client reviews and approvals, 74% of our survey respondents listed creative development as their top bottleneck. This makes sense: getting everyone on the same page and collecting the necessary data, content and input for a campaign can take a lot of handholding. Coordinating phone calls, developing creative briefs, agreeing on strategy and direction, and collecting files all take time, and time is money. Planning a global campaign multiplies this complexity, as providers struggle to coordinate across time zones, countries, languages, currencies and cultural differences.
- Client reviews and approvals: This key bottleneck was the top concern for 79% of our survey respondents. Collaborating with clients to review and provide feedback on a campaign in a timely manner, agreeing on revisions, and getting final signoff on proofs are all steps that can add days, if not weeks, to campaign execution. Multiple rounds of calls, emails and meetings are usually involved, and tracking changes and revisions can be a convoluted process at best.
- Sourcing and procurement: Over half or survey respondents marked this as a top concern. While many procurement pros have their preferred vendors, clients often demand multiple bids, cost analysis, visibility into pricing and more. RFIs and RFQs must be developed and distributed, responses tracked and estimates procured. Quotes must be evaluated against historical bids as well as competitive pricing. Final vendor selection is almost never about the lowest price, but is a complex equation of the best fit for the job given the budget.
- Analytics and Reporting: Collecting, analyzing and reporting detailed performance metrics is a top priority for any corporate executive, and a major challenge for service providers. As the availability of data to drive decision making continues to permeate every business, clients are asking for more visibility and transparency into procurement processes throughout the marketing supply chain. Fixed markups are quickly becoming a relic of the past, and clients continue to demand more value for less cost. The ability to provide transparency into procurement processes and performance data will soon become a competitive requirement for service providers.
Although each of these print procurement bottlenecks poses challenges for both service providers and their clients, new technologies and business models are evolving to address these challenges. In our next post, we’ll look at how these technologies are being used to streamline procurement bottlenecks and increase productivity throughout the marketing supply chain.